liquidated. After making the closing entries on June 30, 2019, the following accountsAfter several years of operations, the partnership of Arenas, Dulay and Laurente is to beLump-Sum Liquidation with Gain on RealizationProblem #1remained open:Account BalanceAccount TitleDebitCreditCashNon-cash AssetsP 50,0002,350,000LiabilitiesArenas, CapitalDulay, CapitalLaurente, CapitalP400,000900,000500,000600,000The non-cash assets are sold for P2,650,000. Profits and losses are shared equally.Required:Prepare a statement of partnership liquidation and the entries to record the following:1. Sale of all non-cash assets.2. Distribution of gain on realization to the partners.3. Payment of the liabilities.4. Distribution of cash to the partners.

Partnership Liquidation:-It is the process in which assets get sold out, liabilities get paid off…

Prepare a statement of partnership liquidation and the entries to record the following: 1. Sale of all non-cash assets. 2. Distribution of gain on realization to the partners. 3. Payment of the liabilities. 4. Distribution of cash to the partners.

Prepare a statement of partnership liquidation and the entries to record the following: 1. Sale of all non-cash assets. 2. Distribution of gain on realization to the partners. 3. Payment of the liabilities. 4. Distribution of cash to the partners.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

liquidated. After making the closing entries on June 30, 2019, the following accounts
After several years of operations, the partnership of Arenas, Dulay and Laurente is to be
Lump-Sum Liquidation with Gain on Realization
Problem #1
remained open:
Account Balance
Account Title
Debit
Credit
Cash
Non-cash Assets
P 50,000
2,350,000
Liabilities
Arenas, Capital
Dulay, Capital
Laurente, Capital
P400,000
900,000
500,000
600,000
The non-cash assets are sold for P2,650,000. Profits and losses are shared equally.
Required:
Prepare a statement of partnership liquidation and the entries to record the following:
1. Sale of all non-cash assets.
2. Distribution of gain on realization to the partners.
3. Payment of the liabilities.
4. Distribution of cash to the partners.

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